# BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

DELTA AIR LINES, INC.

for a frequency allocation

(Atlanta/Detroit - Brazil) )

)

)

)

)

)

) Docket DOT-OST-2010-

APPLICATION OF DELTA AIR LINES, INC.

Communications with respect to this document should be addressed to:

Glen Hauenstein

Executive Vice President –

Network Planning and Revenue Management

Robert J. Cortelyou

Senior Vice President – Network Planning

Andreas Renner

Director – International Network Planning

Chris Kennedy

General Manager – International

Network Analysis

DELTA AIR LINES, INC.

1030 Delta Boulevard

Atlanta, Georgia 30320 Andrea Fischer Newman

Senior Vice President – Government Affairs

DELTA AIR LINES, INC.

1212 New York Avenue, N.W.

Washington, D.C. 20005

Alexander Van der Bellen

Managing Director – Government Affairs

& Associate General Counsel

Jeff Morgan

Regional Director – Government Affairs

DELTA AIR LINES, INC.

1212 New York Avenue, N.W.

Washington, D.C. 20005

(202) 842-4184

sascha.vanderbellen@delta.com

July 23, 2010

# BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

DELTA AIR LINES, INC.

for a frequency allocation

(Atlanta/Detroit - Brazil) )

)

)

)

)

)

) Docket DOT-OST-2010-

APPLICATION OF DELTA AIR LINES, INC.

I. Introduction

Delta Air Lines, Inc. (“Delta”) hereby applies for an allocation of three

(3) frequencies to support additional nonstop Brazil services between Atlanta and Detroit,

on the one hand, and Rio de Janeiro and Sao Paulo, Brazil, on the other hand. There

are three frequencies currently available in the unallocated pool which are eligible for

service in any U.S.-Brazil city-pair market, s ubject to the temporary restriction that they

may not be used at Sao Paulo until certain airport infrastructure constraints are resolved.

Consistent with these terms, Delta would use the requested frequencies to provide three

weekly round-trip flights between Atlanta and Rio de Janeiro, effective October 28, 2010.

Upon the effectiveness of this new authority, Delta plans to redeploy three of its

existing unrestricted frequencies from the Atlanta-Rio de Janeiro route to Detroit-Sao

Paulo. This will enable Delta to commence its planned new Detroit-Sao Paulo flight with

five weekly frequencies, rather than the very limited two frequency pattern currently

planned. Delta’s existing Atlanta-Rio de Janei ro frequencies are not subject to any citypair limitations, nor are they subject to the temporary airport infrastructure constraints at

# Application of Delta

Page 2

Sao Paulo. Thus, these frequencies are currently and immediately eligible for service on

the Detroit-Sao Paulo route.

Delta believes that the public interest would be well served by its proposal. It is

very important that Delta be able to offer a viable service pattern at Detroit, which

requires at least five weekly frequencies. Detroit is a major industrial-manufacturing

center and is home to Delta’s second-largest hub, providing extensive coverage of the

Midwest region and Northern tier of the United Sates.

Delta previously announced that it plans to introduce Detroit-Sao Paulo service in

October 2010 at a level of two weekly flights. However, two weekly flights is not enough

to meet the demands of this important business market, nor to enable Detroit to provide

effective intergateway competition to exis ting U.S.-Sao Paulo gateways – all of which

have at least daily service. Delta’s hope and expectation in making a start-up

investment in Detroit-Sao Paulo is that Delta would be able to grow the service from the

initial two weekly flights to provide a mo re comprehensive and effective service pattern

as Sao Paulo-eligible frequencies became available.

Delta’s service proposal will maximize the public benefits attainable from these

limited entry frequencies. There is greater demand for service to Sao Paulo, Brazil’s

leading business center, than for Rio de Janeiro, wh ich is primarily a leisure destination.

By allocating the three available frequencies to Delta for Atlanta-Rio de Janeiro service,

the Department will, in effect, be able to create three new flights to Sao Paulo. Moreover,

because Delta is currently constrained to offering a sub-optimal pattern of just two

weekly flights at Detroit, the benefits attained from these two existing frequencies will be

substantially enhanced as part of a more effective five-frequency pattern.

# Application of Delta

Page 3

II. Service Proposal

Delta proposes to operate three additional weekly U.S.-Brazil frequencies,

effective October 28, 2010, or within 90 day s of receiving all necessary government

approvals. Delta will utilize 216-seat Boeing 767-300ER aircraft, equipped with 35

BusinessElite and 181 economy class seats.

 Delta’s Atlanta-Rio de Janeiro service will directly use the requested

frequencies without any changes to the existing service pattern.

 Delta will redeploy three unrestricted frequencies from Atlanta to DetroitSao Paulo, enabling Delta to begin new nonstop service on the route at a

level of five weekly frequencies, rather than two as currently scheduled.

Delta's proposed nonstop service schedule, operating statistics, and aircraft information

are set forth in the attached exhibits.

III. Delta Requires Sufficient Frequencies to Establish Detroit as

a New and Effective Gateway For U.S.-Sao Paulo Passengers.

Delta seeks to establish Detroit as a new gateway for U.S.-Sao Paulo service.

Detroit and Sao Paulo are each major industrial-manufacturing centers with strong

communities of interest and a significant demand for nonstop service. Detroit is also

home to Delta’s second-largest hub, where Delta and its regional affiliates operate more

than 575 peak day departures from the hub and will provide nonstop-to-nonstop service

for nearly 100 U.S. cities. DL-101.

Delta plans to start Detroit-Sao Paulo service in October 2010 with two weekly

flights. However, in order for Detroit to realize its potential and to enable Detroit to

compete on par with other hubs, Delta needs additional frequencies to operate at least

# Application of Delta

Page 4

five weekly (and preferably daily) flights. Indeed, every other U.S.-Sao Paulo hub has

daily – or greater service:

Detroit-Sao Paulo will be an important business route, connecting Detroit and the

Midwestern region to Brazil’s industrial center. Business passengers require frequent

and more flexible service, and a twice weekly service pattern is not viable in the long run.

Major U.S. multinational corporations including Ford and General Motors have

previously expressed their support and desire fo r regular, daily service on the route. DL201. Those sentiments were also expressed by the Michigan Congressional delegation,

and the Wayne Country Airport Authority. Id., Docket OST-2010-0090. Delta’s proposal

provides the Department with the opportunity to satisfy this important unmet service

need – and to do so on a concrete, time-definite schedule which the Department found

lacking in the recently concluded prior proceeding.

# Application of Delta

Page 5

III. An Allocation of Three Frequencies to Delta Will Enhance

Inter-Carrier and Inter-Alliance Competition.

Delta needs additional frequencies to compete effectively with American,

United/Continental, and the burgeoning oneworld and Star alliance services between the

United States and Brazil. In terms of the unrestricted frequencies that are necessary to

serve Sao Paulo, American has now amassed 58 frequencies – compared to just 23 for

Delta. DL-104. This more than two-fold limited-entry frequency advantage gives

American leverage in the U.S.-Brazil marketplace. Having attained this advantage,

American is intent on preserving it – recently offering up DFW-Rio de Janeiro service

where it had previously expressed no interest. Delta urges the Department to reject

these tactics which are plainly intended to occupy the last Sao Paulo-eligible frequencies

and deprive Delta of the rights it needs to offer competitive service at Detroit.

United/Continental already have antitrust immunity for international services and

are engaged in a merger transaction with a combined 35 Sao Paulo-eligible frequencies

between them. Moreover, Star Alliance partners United and US Airways recently put

forward a joint proposal to swap Sao Paulo-eligible frequencies between one another,

putting into play all 42 Sao Paulo-eligible frequencies of the U.S. Star partners. See

,

Docket OST-2010-0183; DL-104. By contrast, Delta has only 23 frequencies at its

disposal and no other means to acquire the rights it needs to expand service at Detroit.

IV. Conclusion

The Department can significantly e nhance competition and consumer benefits

by allocating the three available U.S.-Brazil frequencies to Delta. With these rights,

Delta will preserve its existing network while simultaneously expanding its planned new

service on the Detroit-Sao Paulo route. The additional frequencies will enable Delta to

commence Detroit-Sao Paulo service in October 2010 at a level of five weekly

# Application of Delta

Page 6

frequencies, rather than two. This provides customers with a much more attractive

service option, and greatly enhances the com petitive viability of the service.

Respectfully submitted,

_________________________________ Alexander Van der Bellen

Managing Director, Government Affairs

& Associate General Counsel

DELTA AIR LINES, INC.TULTULTULTo HNLTo HNLTo HNLTo HNLTo HNLTo HNLTo ANCTo ANCTo ANCBMIBMIBMIMDWORDORDORDPIAPIAPIAPIACIDCIDCIDEWREWREWRHPNHPNHPNLGALGALGAJFKJFKJFKSWFSWFSWFSWFSWFSWFBGMBGMBDLBDLBDLMHTMHTMHTMDTMDTMDTSCESCESCEDCADCADCAIADIADIADIADITHITHITHITHSYRSYRSYRELMELMROCROCROCALBALBALBMSNMSNMSNFNTFNTFNTMBSMBSMBSGRRGRRGRRCLECLECLEGRBGRBGRBCWACWACWAESCESCESCMQTMQTMQTSDFSDFSDFEVVEVVEVVDLHDLHDLHMSPMSPMSPDSMDSMOMAOMAOMAFSDFSDFSDRSTRSTRSTSFOSFOSFOLAXLAXLAXABEABEABEAPNAPNAPNATWAVPAVPAVPAZOAZOAZOBGRBGRBGRBOSBOSBOSBTVBTVBTVBUFBUFBUFBWIBWIBWIBZNBZNBZNCAKCAKCAKCHOCHOCHOCIUCIUCIUCIUCMHCMHCMHCMICMICMICRWCVGCVGCVGDAYDAYDAYDENDENDENERIERIERIERIFWAFWAFWAICTICTICTICTINDINDINDINDLANLANLANLASLASLASLEXLEXLEXLSELSELSEMCIMCIMCIMKEMKEMKEMLIMLIMLIORFORFORFPDXPDXPDXPHLPHLPHLPHXPHXPHXPITPITPITPITPLNPLNPLNPVDPVDPVDPWMPWMPWMPWMRICRICRICRICROAROAROASANSANSANSBNSBNSBNSEASEASEASGFSGFSGFSLCSLCSLCSMFSMFSMFSNASNASNASTLSTLSTLTOLTOLTOLTVCTVCTVCXNAXNAXNASao PauloSource: July 2010 schedulesDTWExhibit DL-101Page 1 of 1Delta’s Detroit-Sao Paulo Service Will Establish a MajorNew Hub Gateway for the Midwest RegionEWREWRLAXLAXORDORDMIAMIAMIAMIAMCOMCOATLATLCLTCLTIAHIAHIAHIAHDFWJFKJFKIADIADIADIADDelta’s Detroit-Sao Paulo Service Gives the UnderservedMidwest Region A Second U.S. Gateway to BrazilDTWExhibit DL-102Page 1 of 1Existing Brazil GatewayExhibit DL-103Page 1 of 1Detroit Will Be the Only U.S. Carrier Gateway to Sao PauloWith Less Than Daily Service237777777720510152025AA MIA AA DFW AA JFK CO EWR CO IAH UA IAD UA ORD DL ATL DL JFK DL DTWWeekly U.S. Carrier Sao Paulo Frequencies By GatewaySource: December 2010 schedulesExhibit DL-104Page 1 of 1Oneworld and Star Have Far More U.S.-Brazil FrequenciesThan SkyTeam584223010203040506070oneworld (American) Star (United/Continental/USAirways)SkyTeam (Delta)U.S. Carrier Unrestricted Brazil Combination Frequencies Allocated by AllianceNote: Counts include Oct. 2009 and Oct. 2010 frequencies that are GRU eligible once infrastructure constraints are removed.Delta’s Detroit – Sao Paulo Nonstop ScheduleProposal – Northern Hemisphere Winter SeasonDL 205We/Th/Fr/Sa/SuBoeing 767-300ERFlight NumberFrequencyEquipmentDL 204Mo/Tu/Fr/Sa/SuBoeing 767-300ER1925090010:350835002511:10Detroit (DTW)Sao Paulo (GRU)Elapsed Time+1GMT (-5)GMT (-2)Note: All times are local. Schedule includes 2 weekly flightsthat Delta will operate using existing U.S.-Brazil unrestricted frequencies. These 2 weekly flights willoperate southbound on Sunday and Thursday and northbound on Tuesday andSaturday. Additional frequencies effective October 28,or within 90 days ofreceipt of all required government approvals.Exhibit DL-105Page 1 of 2Delta’s Detroit – Sao Paulo Nonstop ScheduleProposal – Northern Hemisphere Summer SeasonDL 205We/Th/Fr/Sa/SuBoeing 767-300ERFlight NumberFrequencyEquipmentDL 204Mo/Th/Fr/Sa/SuBoeing 767-300ER1745051510:300720211511:05Detroit (DTW)Sao Paulo (GRU)Elapsed Time+1+1GMT (-4)GMT (-3)Exhibit DL-105Page 2 of 2Note: All times are local. Schedule includes 2 weekly flightsthat Delta will operate using existing U.S.-Brazil unrestricted frequencies. These 2 weekly flights willoperate southbound on Sunday and Thursday and northbound on Monday and Friday.Annual Operating StatisticsDelta’s Detroit – Sao Paulo Nonstop Service ProposalAircraftAnnual DeparturesSegment Miles (sm)Plane Miles (sm)ASMsFuel Burn (gallons/hour)Fuel Consumption (millions of gallons)Boeing 767-300ER5205,1052,645,600573,393,6001,6589.2Statement on fuel availability: Delta anticipates no difficultyin obtaining fuelfrom its current suppliers at Detroit and Sao Paulo.BusinessElite ClassEconomy ClassTotal35181216Seating ConfigurationNote: Statistics include 2 weekly flights that Delta will operate using existing U.S.-Brazil unrestricted frequencies.Exhibit DL-106Page 1 of 1Aircraft Statement•Delta will use aircraft on hand fromamong the 56 Boeing 767-300ER aircraftits fleet. These aircraft are in widespread use throughout Delta’s internationalnetwork. All of Delta’s aircraft are FAR 36 compliant.Exhibit DL-107Page 1 of 1Exhibit DL-201

# May 7, 2010

The Honorable Ray LaHood, Secretary

United States Department of Transportation

1200 New Jersey Avenue, SE

Washington, DC 20590

Re: Delta Air Lines Application for

Detroit – Sao Paulo Frequencies

Docket OST-2010-0090

Dear Secretary LaHood;

On behalf of Ford Motor Company, I am writing to ex press our strong support for the

application of Delta Air Lines for additional frequ encies usable on the Detroit-Sao Paulo

route.

Ford Motor Company has an important and growing pre sence in Brazil, and we are very

pleased that Delta has announced nonstop Detroit-Sa o Paulo service beginning in

October, 2010. Unfortunately, Delta is restricted to offering just two flights a week. The

needs of international business travelers and inter national commerce would be better

served if Delta were able to operate a daily servic e.

I understand that Delta has applied to DOT for auth ority that will enable the expansion

of service between Detroit and Sao Paulo as soon as airport infrastructure constraints

are resolved. I urge you to take this opportunity to provide Detroit with additional

service on this important new route.

Thank you for consideration of this request.

Sincerely,

KENNETH W. SHARPE

Global Strategy & Communications Manager

Ford Motor Company

1 American Road

Dearborn, Michigan 48126

# CERTIFICATE OF SERVICE

A copy of the foregoing Application has been served this 23rd day of July, 2010,

upon the following persons via email:

carl.nelson@aa.com

howard_kass@usairways.com

benjamin.slocum@usairways.com

hkamen@coair.com

dan.weiss@coair.com

rbkeiner@crowell.com

jeffrey.manley@united.com

steve.morrissey@united.com

robert.land@jetblue.com

jhill@dlalaw.com

dkirstein@yklaw.com

jyoung@yklaw.com

paul.gretch@dot.gov

esta.rosenberg@dot.gov

brian.hedberg@dot.gov

byerlyjr@state.gov

john.allen@faa.gov

Emily.Neuberger@wcaa.us

Joe.Cambron@wcaa.us

mgoldman@sgbdc.com

info@airlineinfo.com